INSIDE WIRELESS: The Network Within the Network New Trend Reduces Enterprise Cellular Costs

Mobile and wireless analyst J. Gerry Purdy recently met with Strata8 Networks, a wireless startup Purdy says is the first of many wireless companies that are developing what Purdy calls the "network within the network." This will allow enterprises with multiple office locations to more cost-effectively connect cell calls between offices. Here, Purdy explains why the "network within the network" will be another new, exciting growth area for wireless communications.

Imagine for a minute that you're building a nationwide wireless network. You put up cell towers in each major metropolitan area. The population you cover grows. You put up more cell towers in less populated areas. Eventually, you cover most of the United States with service for 250 million to 300 million people. The number of people having cell phones grows as well, with "penetration" approaching 70 percent (it's over 100 percent in some areas where people have more than one cell phone).

Now imagine what happens when a cell phone becomes very pervasive and very convenient: Many calls are made to people who are not very far away. In fact, in an office setting, most of the people using cell phones today are calling fellow employees in the same building or enterprise campus. In essence, more costly cell phone services have replaced the traditional, low-cost office phone. While there may be a phone sitting on the desk, most people just use their cell phones to make all of their calls because it's so convenient. But most of us have to walk outside or go next to a window in order to make a call inside a building.

In this situation, it doesn't make any sense to use the wireless operator's entire back-end infrastructure to support making a call to someone who might be just a few feet away. Instead, it would be more efficient if you could intercept the call with a local network that would then route it to the person nearby?Ã¶?Ã§?Ãthus saving time and money. Such a local network would also provide good coverage throughout the entire organization.
FedEx went through this same discovery: Many packages it picked up in a major city high-rise office building were being sent to another floor in the same building or to a location very close by. Instead of sending such packages to Memphis on an airplane, FedEx now reroutes local packages directly to save both time and money.
There are a number of ways in which a cell call could be intercepted and routed locally. One way would be to use dual-mode cell phones that include Wi-Fi and have the local signal be a VOIP call (much like what's done with Wi-Fi-based phones operating on an enterprise PBX). The UMA (Unwired Mobile Access) standard is developing around this capability. But this takes dual-mode handsets, which are not yet widely manufactured (but will be in a few years), and uses unlicensed 802.11x spectrum.
Another way to intercept and route local calls is to use a local cellular network that operates on the same frequency as the cellular provider, but has a much stronger signal and logic to intercept and reroute the call on the local network.
It's pretty easy to see that a company could build a "network within the network" using a "Pico cell" inside the enterprise campus, in which they would allow users (typically in a company setting) to use their cell phones inside the office environment. There would be great reception. Calls to other employees would stay within the enterprise. Calls would be on one common wireless network. This would require all employees to use a common wireless operator, but, eventually, these services may support multiple operators' networks. Costs would be reduced.
Every enterprise is seeing telecommunications costs rise as employees make more of their business calls using their cell phones instead of the land-line phones. The "network within the network" enables elimination of per-minute pricing for calls made within the local network. The same benefits would accrue to data transfer when employees wanted to receive e-mail or get data off an enterprise server. An additional benefit is that these calls and data, while on standard cell phones, would remain within the enterprise firewall. This will lead to greater enterprise security, call routing control and real-time call detail reporting and analysis.
Strata8 Networks has just announced its first enterprise network that will provide "network within the network" services. Its first wireless operator partner is Sprint. Today, its services will only operate in the 16 U.S. markets in which Strata8 Networks has licensed spectrum?Ã¶?Ã§?Ãbut that's good enough for companies located entirely in one of these markets or with offices in these specific 16 regions.
Eventually, Strata8 Networks?Ã¶?Ã§?Ãand other vendors that will surely announce similar "network within the network" services?Ã¶?Ã§?Ãwill support enterprises with multiple office locations using the Internet to connect calls between offices. This will allow employees to continue to make calls or download e-mail just as they normally would. The "network within the network" services will do all the heavy lifting to manage the traffic and save the company money along the way.
Someday, we'll have multiple networks within networks across the entire United States. It's all about intelligent communications. We commend Strata8 Networks for leading the way in this exciting new arena of wireless communications.
J. Gerry Purdy, Ph.D., is vice president and chief analyst with the Frost & Sullivan North American Information & Communication Technologies Practice. As a nationally recognized industry authority, he focuses on monitoring and analyzing emerging trends, technologies and market behavior in the mobile computing and wireless data communications industry in North America. Since joining Frost & Sullivan in 2006, Dr. Purdy has been specializing in mobile and wireless devices, wireless data communications and connection to the infrastructure that powers the data in the wireless handheld. He is author of Inside Mobile & Wireless, which provides industry insights and reaches over 100,000 readers per month.For more than 16 years, Dr. Purdy has been consulting, speaking, researching, networking, writing and developing state-of-the-art concepts that challenge people's mind-sets, and developing new ways of thinking and forecasting in the mobile computing and wireless data arenas. Often quoted, his ideas and opinions are followed closely by thought leaders in the mobile & wireless industry. He has a Ph.D. in Computer Science from Stanford University. He can be reached at gerry.purdy@frost.com.
Disclosure Statement: From time to time, I may have a direct or indirect equity position in a company that is mentioned in this column. If that situation happens, then I?Ã¶?Ã§?Ã»ll disclose it at that time.

J. Gerry Purdy, Ph.D., is Principal Analyst of Mobile & Wireless at MobileTrax LLC.Dr. Purdy has been covering mobile, wireless, cloud & enterprise for the past 20+ years. He writes analysis and recommendations each week in an easy-to-read manner that helps people better understand important technology issues and assist them in making better technology purchasing decisions.

Disclosure Statement: From time to time, I may have a direct or indirect equity position in a company that is mentioned in a column. If that situation happens, then I'll disclose it at that time.